Ummm, Fannie and Freddie jointly own 5 trillion of housing debt. IF just 10% goes bad that is 500 billion that American taxpayers are on the hook for. I suspect it will turn out to be 30% or better before this crisis is over because they are still loaning money at 3% down with 30 year fixed terms. In other words, way too cheaply. This is propping up housing prices. When rates go up, Fannie and Freddie will have to write more down as housing prices fall.
Fannie and Freddie are a scam and America is the patsy.
